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Thursday, 6 March 2014

Singapore downplays its world's most expensive city

People stand along the Marina Bay promenade in Singapore on March 4, 2014. The soaring cost of cars and utilities as well as a strong currency have made Singapore the world's most expensive city, toppling Tokyo from the top spot, a survey showed March 4. AFP PHOTO / ROSLAN RAHMAN (Photo credit should read ROSLAN RAHMAN/AFP/Getty Images)

SINGAPORE - Singapore on Wednesday
played down a global survey showing that it is now the world’s most
expensive city, a finding which has triggered outrage among Singaporeans
struggling with rising costs.
Finance Minister Tharman Shanmugaratnam said reports like the 2014
Worldwide Cost of Living survey by the Economist Intelligence Unit (EIU)
are aimed at measuring expatriates’ expenses.

“It is not that these surveys are wrong, or that they are misguided. But
they are measuring something quite different from the cost of living
for an ordinary local in different cities around the world,” Tharman
said in a parliamentary speech.

In the survey released Tuesday, Singapore toppled Tokyo as the world’s
costliest city, a result the EIU attributed to the high cost of cars and
utilities as well as a strong local currency. Paris was in second
place.

The survey examines prices of 160 products and services including food,
toiletries, clothes and domestic help in 140 cities, and is aimed at
helping companies calculate allowances for executives overseas.

Tharman noted that the basket of goods and services evaluated by the EIU
included imported cheese, filet mignon, “Burberry-type raincoats,” the
four best seats in a theater and three-course dinners for four in
high-end restaurants.

“The EIU tries to put together a basket of what they think are
expatriate costs, perhaps more on the higher end of expatriates,”
Tharman said. ”

It is quite different from the goods and services
consumed by ordinary Singaporeans.”

He also reiterated a point noted by the EIU — that Singapore’s rising
living costs for expatriates are driven by the strengthening of its
currency.

“What is important for us is that Singaporeans, and particularly low-
and middle-income Singaporeans, have incomes that grow faster than the
cost of living,” Tharman said.

Jon Copestake, editor of the EIU report, acknowledged the points raised
by Tharman but told AFP the basket of goods includes many everyday items
as well.

“The survey basket ranges from a loaf of bread to a luxury car. In fact,
the highest-weighted category in our survey is that of groceries and
everyday staples which include goods like fresh fruits and vegetables,
meat, fish, rice, etc.,” Copestake said.

“Expatriates make up a very significant proportion of Singapore’s
population, and this means that the results of our survey will be more
keenly felt by a higher proportion of the people who live and work
there.”

The survey’s release provoked strong online reactions from Singaporeans,
who saw it as confirmation of their complaints about soaring living
costs.

Others however saw it as a sign that Singapore has attained high living standards.

Singapore’s per capita income of more than $51,000 in 2012 masks a widening income gap between the richest and poorest citizens.

By Bhavan Jaipragas, AFP

S’pore ranked world’s most expensive city by EIU
.

The high cost of cars and utilities as well as a strong currency have made Singapore the world's most expensive city. (AFP/Roslan Rahman)

SINGAPORE: Singapore has jumped to the top of the
Economist Intelligence Unit's (EIU) ranking of the world's most
expensive cities, overtaking the likes of Tokyo and Osaka as the
Singapore dollar appreciated against the yen.

Singapore was ranked sixth in the EIU's survey last year, behind the two Japanese cities, Sydney, Oslo and Melbourne.

According to the EIU, Osaka and Tokyo fell off the top of its cost of living ranking because of the weaker yen.

Tokyo,
the most expensive city to live in for 2013, fell to joint sixth place
alongside Caracas, Geneva and Melbourne, while Paris is second, ahead of
Oslo, Zurich and Sydney.

Ten years ago, Singapore was number 18 on the list.

The
EIU report compares the price of products and services such as food,
clothing, transport and domestic help among 140 cities with New York
city as a base.

According to the survey, Singapore's curbs on
car ownership, which include a quota system and high taxes, make it the
most expensive city to run a car.

A new Toyota Corolla Altis, for example, could cost as much as US$110,000 in Singapore but only US$35,000 in Malaysia.

And overall transport costs in Singapore are almost three times higher than those in New York.

But the survey does not include public transport, which is most commonly used by Singaporeans.

In
addition, the lack of natural resources and energy supplies means
Singapore is the third most expensive city for utility costs.

The
survey also shows that Singapore is the priciest place in the world to
buy clothes, as shopping malls along the prime Orchard Road shopping
belt import luxury European brands.

As for housing, Singapore,
being smaller in size than New York City, has seen home prices jump to
record highs in recent years amid rising wealth and an influx of
foreigners.

But the survey does not include public housing.

And
it must be noted that the EIU survey is aimed at helping companies and
HR managers calculate allowances for executives or expatriates being
sent overseas.

This means that their spending patterns may
differ from locals. Hence, while cars and utilities are expensive,
public transport and hawker food in Singapore are cheaper than in most
developed cities.

And latest data also show that in January,
consumer prices in Singapore rose at their slowest pace in four years,
rising by 1.4 per cent from a year ago.